OREANDA-NEWS. National Rating Agency has affirmed its 'AA-' credit rating on the Luxembourg-based Vardarac S.a.r.l. The outlook for the rating is Stable. The company's first-time 'AA-' national scale credit rating from NRA was assigned on Jan. 30, 2014. The rating was affirmed with a stable outlook on Feb. 2, 2015.

The rating benefits from the high quality of Vardarac's ultimate asset (the Legenda Business Center), stable cash flows of Vardarac's borrower, which serve as a reliable source of repayment for the company's loans and credit facilities, and the strong credit profile of O1 Properties, Vardarac's largest ultimate owner, that has willingness and capacity to provide financial and organizational support to the company. The Rating Agency also notes the company's robust lessee base, predominantly long-term lease contracts and the fact that Vardarac markedly reduced its vacant space in 2015.

The rating is constrained by Russia's adverse macroeconomic situation that affects the lease rate trends and business centers' occupancy rates. These factors caused some decrease in the company's lease proceeds in 2015 (in US dollar terms). In addition, the company's performance may be affected by the currency risk, as Vardarac has been using dollar-denominated debt to fund its projects - at a time when the office real estate market shows a particular propensity to fix the lease rates or shift to ruble-denominated lease rates.